Bloomberg News

Senate Vote Will Allow $1.2 Trillion Debt-Limit Increase

February 03, 2012

(Adds lawmaker comments beginning in third paragraph.)

Jan. 26 (Bloomberg) -- The U.S. Senate voted to permit an increase in the nation’s debt limit designed to be large enough to accommodate borrowing through the November election.

The chamber today voted 52-44 to kill a measure that would have blocked a $1.2 trillion increase -- to $16.394 trillion -- in the legal cap on borrowing. Under a convoluted agreement among lawmakers, that allows the debt ceiling to rise automatically without additional government action.

The maneuver was aimed at giving Republicans the chance to show their opposition to deficit spending without risking a default. “We should be working together to lower the debt, not having votes to increase it,” said Senate Minority Leader Mitch McConnell, a Kentucky Republican.

The vote was required by a budget agreement last year in which Republicans agreed to give President Barack Obama the power to unilaterally raise the debt ceiling so long as they didn’t have to pass it. The House passed the measure, called a resolution of disapproval, by a 239-176 vote last week.

Senator Dick Durbin, the chamber’s deputy Democratic leader, complained that many of the Republicans opposing the debt increase supported the spending initiatives that made lifting the borrowing cap necessary.

“Don’t vote for the spending if you won’t vote for the borrowing because we know now they are linked together -- they are one in the same,” said Durbin, of Illinois.

The Treasury Department has said it expects no need for another increase in the debt limit until after the November election, though it’s impossible to say for certain because tax revenue can vary widely with the strength of the economy. Last year, the Treasury Department revised its deadline for lifting the cap when revenue proved stronger than anticipated.

Even if the government approaches the limit before voters head to the polls, the administration will have accounting moves it can use to stave off default and postpone the next debt-limit vote until a post-election “lame-duck” session of Congress.

The measure is H.J. Res. 98.

--Editors: Katherine Rizzo, Jodi Schneider

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editors responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net; Jodi Schneider at jschneider50@bloomberg.net


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